Business Insurance

What you need to know about flood insurance for the business

Nothing is impervious to water. Somehow we don't think about how destructive little raindrops could be. If there's a bad storm we believe about trees falling, hail pelting windows and cars, branches being thrown around like twigs – you realize, the usual. But somehow we forget about the water.

Flooding can happen for a range of reasons, not only from heavy rain or even hurricanes (although both can create some pretty serious deluges.) Mudslides can cause flooding. So can snowmelt that runs into rivers. There's also the chance that nearby development and construction can alter the land so it can't drain like it should. At any rate, whenever your building is doing its best impression of the swimming pool, it doesn't really matter what caused the flooding in the first place. You just want the water from there.

While we can't completely shut Mother Nature and her swamps of water out, being prepared might help reduce the damage your company could face from a surprise flood. We'll explain the basics of commercial flood insurance, but we'll also review some ways in which you can bolster your business's defenses against flooding.

Isn't flooding covered under my current insurance BOP?

Well – no. It isn't. A traditional BOP won't cover flood damage to your business. It's only one of those things that aren’t included inside a typical policy, meaning you need to go in search of your coverage if you want to be protected from flooding.

What if I’m not required to have flood insurance?

Keep in mind that the NFIP reports that one-third of all claims are from businesses in low-risk areas. Floods can happen even if you're not in a coastal area. Remember how we discussed super rainstorms?

The good news is the fact that flood insurance isn't just for high-risk businesses. You can get a preferred risk policy if you are in a low-risk area but wish to make sure that you're extra protected.

What factors contribute to my premium?

There are a few things that influence the premium you might be spending money on flood insurance:

  • How old the building is
  • How many people work there
  • How tall the building is
    • Where your company is located inside the building (if you share your space)
  • Your deductible
  • The building/contents coverage that you choose
  • Whether you've put flood prevention measures in place

And with that segue, how can I protect my business from flood damage?

You can be proactive and take steps to lessen the damage and losses that your business would face within the event of a flood. Some stuff you can perform are:

If you know that you are about to obtain walloped by a major storm, you can put up flood boards to protect your business. Sometimes we're lucky enough to have a little bit of warning before a flood happens, so we can attempt to minimize the damage.

Can't have water seeping up in the ground and through the floor, can we?

This one's plain logic. The higher up things are in your building, the less likely they're to become consumed by a flood. If you've got some good, high shelving in position, you can pile your valuable items onto them to keep them out of the water's grasp.

Make sure that your outlets, fuse boxes, etc. are high enough to escape being fried. You should take your area's flood history into account by finding out how high the water has come before. Electricity and water are not friends.

It's also a good idea to know how to turn off the utilities for the business in case you face an emergency. You just never know when you might need to turn them off.

Having a pump might help make the cleanup and recovery easier should you choose ever encounter a flood.

It would be helpful to have some emergency supplies on-hand. Plywood, sandbags, plastic sheets, nails and hammers, and the like can come in handy.

Do your pipes have non-return valves? Do both the inlet and the outlet pipes have non-return valves?

Know who you would need to call if the building floods and have their numbers easily accessible. It's not going to help if you need to scramble around for a phone number – or if the phone numbers were eaten by flood water.

The show must go on, right? You have to have a flood battle plan so that you understand how you will keep things going while your building is repaired. Is there a location that you could work out of temporarily? How will you continue to help and support your clients since you've been so rudely ousted out of your building? How will you access your records and other information you might need?

Once you've made your flood battle plan (basically your what-would-happen-if plan) make sure your employees know what it's. You should make sure to post it somewhere that everyone will have the ability to see and review it, and you ought to also discuss it and review it together. The plan should include:

  • Emergency contact info
  • Map of important places in the building (where supplies are located, in which the utility shut-off is, etc.)
  • How they can protect their belongings and the company's property
  • What they can do to minimize business interruption
  • Checklists of what would have to be done in different scenarios
  • A meeting place just in case an emergency evacuation is required

It's usually a good idea to make sure that everyone knows how to handle a disaster or a potential disaster.

Preparation is everything when it comes to handling a natural disaster. You'll be doing yourself an enormous favor for time to protect your business from flood damage before Mother Nature decides to swamp your building for which appears like no reason at all. Remember, it's never just a little water. Many businesses that face flooding or other disasters don't ever return from them.

On that somber note, should you have any queries about your insurance policy or are interested in getting free business insurance quotes, let us know! We love insurance, so we're more than pleased to talk to you about your risks and how you can stay protected from them.

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